South Korean officials have given their approval to a proposition that seeks to modify the countryโs Public Service Ethics Act to encompass virtual assets, including cryptocurrency.
Amendments Seek to Address Disclosure Gaps and Impose Stricter Regulations on Cryptocurrencies
Theย present legislation mandates Government officials to disclose their holdings of stocks, bonds, jewelry, gifted memberships, and other assets valued at over 1 Million Korean won, which is approximately $760. Nonetheless, the law does not asย ofย now require the disclosure of digital assets.
The decision to amend the law comes in the aftermath of a scandal involving Kim Nam-kuk, a previous member of the South Korean Democratic Party. Kim is facing states of selling greaterย than $4.5 Million worth of cryptocurrency aย yearย ago, shortly prior to an next law revision that would have imposed limitations on such transactions.
Asย aย result to the states, Kim argues that he was not obligated to disclose his digital investment activities and claimsย that he did not sell off his holdings, which were reportedly around 800,000 Wemix coins ($4.5 million), but rather transferred them to another exchange.
Followingย that, Kim left the South Korean Democratic Party and became an independent as he prepared his defense.
To tackle the matter, the South Korean Government is in theย procedure of formulating a revision to theย present legislation. This amendment seeks to include digital assets, including digitalย currency, within the framework of investment disclosure requirements that already apply to other forms of holdings.
The objective is to address possible gaps in the existing law, which have been brought to attention through the observation that virtual assets are not asย ofย now specified in the disclosed information pertaining to a lawmakerโs possessions. This intention has been outlined in an official Government notice pertaining to the proposed amendment.
The amendment proposition received the sub-committeeโs approval on May 19, and it is slated to proceed through a final vote withinย a plenary session scheduled for May 25.
Throughout the previous year, South Korean legislators have been actively engaged in the oversight and regulation of digitalย currencies and associated assets, particularly in response to the tumultuous events surrounding the Luna and Terraย (LUNA) blockchainโs collapse in May 2022.
In April 2023, a comprehensive regulatory package focusing on digitalย currencies was put forth, aiming to introduce more stringent consequences for offenses related to these digital currencies.
The proposed measures include augmented fines and the likelihoodย of sentences ranging from one year to life imprisonment, reflecting a company stance against such illicit activities.
South Koreaโs Bold Step to Counter Cryptocurrency Laundering with Advanced Blockchainย Tech Analytics
In a recent move targeting international cryptocurrency laundering, South Koreaโs prosecution service is poised to acquire state-of-the-art blockchainย tech analytics software. This innovative technology is expected to empower authorities to apprehend individuals involved in illicit activities using digitalย currencies across borders.
Equipped with these new tools, authorities intendย to attract international digitalย currency platforms under similar scrutiny as their domestic counterparts, ensuring a harmonized approach to oversight.
This advancement represents a wholeย lotย of stride towards a comprehensive and interconnected intendย to combat financial crimes associated with digitalย currencies. By embracing cutting-edge blockchainย tech analytics, South Korea positions itself at the forefront of the worldwide fight against cryptocurrency laundering on an international scale.
As South Korean prosecutors forge ahead with this groundbreaking initiative, anticipation builds around the bidding process to develop these cutting-edge tools, commencing theseย 30ย days. With numerous contenders tryingย to shape futureย ofย the cryptocurrency tracking, the competition promises to be fierce.
The contractor chosen to attract this vision to life is faced with an exciting endeavor of delivering these groundbreaking tools by November. This will usher South Koreaโs law enforcement capabilities into a transformative phase, enabling them to combat illicit activities associated with digitalย currencies in a whole new way.
Through this visionary move, South Korean authorities demonstrate unwavering commitment to curbing cryptocurrency exploitation and fostering an environment of enhanced regulatory oversight in the digitalย currency sector. This groundbreaking development underscores the governmentโs proactive stance in strengthening the stability of digital currencies.
Expanding its horizons, South Korea established a strategic partnership with the United States, laying the groundwork for collaborative efforts to bolster the digitalย currency and forex markets betwixt the two countries. This unprecedented alliance heralds a new era of cross-border participation, setting the stage for innovation and synchronized regulations in the rapidly evolving digital finance landscape.
South Korean Exchanges Raided in Lawmakerโs Digital Assets Investigation
Pastย week, the offices of two South Korean digitalย currency exchanges, Upbit and Bithumb, were raided by prosecutors in connection with an investigation involving lawmaker Kim Nam-kukโs digital assets. The raid, conducted by a team from the Seoul Southern District Prosecutors Office, attemptedย to gather transaction records and other materials.
Kim, who reportedly operated his digital investment wallets on Upbit and Bithumb, resigned from his political party on May 14, just before the authoritiesโ raid. States against Kim relate to suspicious digitalย currency transactions he allegedly conducted while working on digital investment legislation in May and November of 2022.
In a Facebook post, Kim mentioned that he did not want to burden his fellow party members with the controversy surrounding his cryptocurrency dealings. He dismissed media reports as containing false facts and expressed his intention to reveal the truth.
Reports suggest that Kim liquidated over $4 Million in digitalย currency before the Financial Action Task Force enforced the โTravel Rule.โ The lawmaker supported a bill that attemptedย to postpone the 20 percent financialย resources profits tax on digitalย currencies from 2023 to 2025.
Kim arguedย that he did not cash out his digital assets but rather transferred them to another exchange, asserting that he was not obliged to report such activity.
Reportsย by Yonhap, Kim was informed to possess around 800,000 Wemix coins in 2021, amounting to approximately $4.5 million.
Bithumb, one of the exchanges allegedly involved in Kimโs funds, has faced scrutiny from local regulatoryย authorities overย recentย months. In December 2022, following accusations of embezzlement and stock price manipulation, the executive who held the largest shares in the exchange met an unfortunate destiny. Followingย that, in January 2023, regulatoryย authorities conducted raids on Bithumbโs offices.
These events are part of the broader crackdown on digitalย currency activities in South Korea. In April, the Bank of Korea was granted the authority to investigate cryptocurrency-related enterprises, allowing banks to request access to transaction data from local exchanges.
Inย addition, legislators passed an initial review of digitalย currency regulations proposals, granting the Financial Services Commission the power to investigate and supervise digital asset-related activities and recommending harsher sentencing guidelines.
